Despite soaring raw-materials costs and the economic downtown, Valspar increased its net sales for 2008 by 7.2 percent to $3.48 billion, including a 10.9 increase in sales in the company’s coatings segment, the company reported. Paints segment sales grew by 3.5 percent, and the company increased its dividend to shareholders for the 31st consecutive year.
“We were pleased with the company’s accomplishments in 2008,” the company said in a letter to shareholders. “Our focus on execution and operational discipline was essential to increased sales and improved productivity. We enhanced our competitive position through the growing strength of our Valspar, Cabot and Huarun brands and expanded our global presence.
“Our disciplined financial management strengthened our balance sheet, and we enter 2009 with reserve liquidity in excess of our anticipated funding needs.
Driven by the strong performance of its acquisitions, Valspar’s sales outside of the United States increased to $1.42 billion and now account for more than 40 percent of total company sales.
The company initiated a global restructuring effort in July, enabling it to lower its cost structure. Net income for 2008 totaled $150.8 million, down $21.3 million from $172.1 million in 2007, due to after-tax restructuring charges of $15.8 million, or $0.16 per share, and the impact of the time lag between significant increases in raw material costs and the effect of increased prices for our products. Adjusted earnings per share, excluding restructuring charges, were $1.66 in 2008 and $1.68 in 2007.
The companyreduced total debt by $94 million and improved its debt-to-capital ratio to 38.8% from 42.4% in 2007.
In February, the Board of Directors elected Gary E. Hendrickson as President and Chief Operating Officer, and elected Lori A. Walker as Senior Vice President and Chief Financial Officer.